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Currencies USD/JPY

Japanese Yen Flat as BoJ Hawkishness Confronts Fed Rate Cut Projections

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  • August 5, 2025
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Japanese Yen remained unchanged against the US Dollar on Tuesday, while hawkish indications from the Bank of Japan and a higher revision in Japan’s Services PMI offered foundational support for the currency. Nevertheless, political uncertainties within Japan and a generally optimistic market mood muted safe-haven demand for the Yen. In the meantime, the US Dollar struggled to push gains as expectations of a September Fed rate cut increased, particularly after softer US job data and political pressure on the Federal Reserve. The USD/JPY pair floated above the 147.00 level, with investors looking to the upcoming US ISM Services PMI and FOMC comments for new direction. KEY LOOKOUTS • June BoJ meeting minutes reiterated the potential for a year-end rate hike, keeping the JPY bears on their toes. • More than 80% chance of a September Fed rate cut continues to pressure the US Dollar. • The recent election defeat of the ruling party has raised some concerns about fiscal policy, potentially hampering BoJ tightening. • The attention of the market now turns to the US ISM Services PMI and comments from Federal Reserve officials for short-term USD/JPY direction. The Japanese Yen continued to trade range-bound versus the US Dollar on Tuesday, as market participants weighed hawkish cues from the Bank of Japan with increasing bets on a September rate cut by the Federal Reserve. Though optimistic domestic data and BoJ’s renewed pledge to policy tightening provided support to the Yen, fears about Japan’s political situation and rising global risk appetite capped its upside. Conversely, the US Dollar received modest support from bond yields but failed to achieve significant traction with softer labor market data as well as political meddling with Fed policy. The market now waits for US ISM Services PMI and FOMC commentary for additional clarity regarding the USD/JPY direction. Japanese Yen remains flat in response to BoJ’s hawkish stance and better domestic data. But political instability in Japan and anticipation of a Fed rate cut limit large USD/JPY movements. Markets wait for US ISM Services PMI and Fed commentary for short-term direction. • June Bank of Japan meeting minutes reinforced the probability of a rate increase in case inflation and growth conform to expectations. • July Services PMI for Japan was 53.6, the highest growth since February. • The election loss of the ruling party impacts the fiscal stability, which may slow BoJ’s tightening trajectory. • Political pressure on the Fed and weak US job statistics drive the rate cut expectation in September. • The currency pair is unchanged on mild USD buying and positive sentiment in the market. • Improved equities in Asia lower the demand for the Yen as a safe-haven currency. • The US ISM Services PMI and FOMC member remarks are the key to short-run USD/JPY action. The Japanese Yen was unchanged against the US Dollar on Tuesday as investors balanced conflicting economic and political indications from Japan and the US. Bank of Japan meeting minutes in June confirmed year-end rate hike expectations, particularly with Japan’s Services PMI experiencing its fastest growth in months. These events gave some respite to the Yen. Political uncertainty due to the poor performance of the ruling party in recent election results has questioned the fiscal future of the country as well as the policy direction of the BoJ, keeping sharp bullish momentum for the Yen in check. USD/JPY DAILY PRICE CHART SOURCE: TradingView At the same time, the US Dollar received faint support from a generally positive risk mood and optimistic market sentiment, but is increasingly coming under pressure as a result of rising bets for the Federal Reserve to cut interest rates in September. Recent US employment data, coupled with political actions targeting the Fed’s autonomy, have contributed to such expectations. Traders are cautious ahead of some significant US data releases, such as the ISM Services PMI, as well as future speeches from Federal Reserve officials, which would influence near-term market mood and set direction for the USD/JPY cross. TECHNICAL ANALYSIS USD/JPY cross has demonstrated strength above the 50% Fibonacci retracement level of the July rally, maintaining support above the 147.00 level. Closest resistance is around the 147.35 level, then the 147.75 area and the 148.00 psychological level, which also happens to be the 38.2% retracement level. A break and hold above this area has the potential to solidify a near-term low and continue to support the bullish thesis. To the detriment, there’s initial support at 146.85, and a break below 146.60 on a decisive note could gain further downwards momentum to 146.00 and even to the 145.85 area, which is the 61.8% Fibonacci mark. Neutrality of oscillators on the daily chart advises caution, with no robust momentum either way currently. FORECAST If the USD/JPY currency pair can remain above the 147.00 level and break through the near-term resistance at 147.35, it would set the stage for additional advancement. A continued break above the 147.75 area and the 148.00 psychological level would signal fresh bullish energy, and prices might head to 148.50 or even beyond. This bullish scenario would be sustained by any hawkish surprise comments by Fed officials or better-than-anticipated US economic data, which will temporarily counter the overall rate cut expectations. On the negative side, inability to stay above 146.85 will leave the pair vulnerable to further selling pressure. A breakdown below the 146.60 support could provokes a steeper decline to the 146.00 area, and then to the 145.85 level, which is the 61.8% Fibonacci retracement of the prior rally. This bearish scenario may unfold if future US data slows or if political realities in the US further erode confidence in the Fed’s independence, reinforcing expectations of rate cuts.

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Currencies USD/JPY

USD/JPY Grinds Higher with US Dollar Rebound and Escalating Tariff Tensions with Japan

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  • July 2, 2025
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USD/JPY currency pair traded slightly higher on Wednesday, aided by a modest US Dollar rebound even as a softer-than-expected ADP jobs report presented surprise June job losses. The Greenback stabilized as markets became wary of the imminent Nonfarm Payrolls release and absorbed Fed Chair Powell’s cautious words. Simultaneously, rising trade tensions between Japan and the US put additional pressure on the Japanese Yen, with threatened tariffs from former President Trump and staunch opposition from Tokyo increasing uncertainty. Bank of Japan Governor Ueda played it safe, emphasizing the requirement of inflation alignment prior to any policy changes. KEY LOOKOUTS • The markets are waiting for clearer indications regarding US labor market strength and possible Fed rate cuts. • Increasing tensions and hawkish postures before the July 9 deadline could influence JPY volatility. • Governor Ueda’s cautious tone supports expectations of slow and modest tightening. • In spite of soft ADP numbers, the rebound in the USD Index indicates that investors have not yet priced in aggressive dovish pivots. The USD/JPY pair made small gains as the US Dollar recovered from its sharp losses at the start of the week after a disappointing ADP employment report indicated surprise job losses in June. Though the data fueled speculation of Federal Reserve rate cuts, investor sentiment was subdued, and focus is now shifting to the coming Nonfarm Payrolls for firmer direction. Simultaneously, rising trade tensions between Japan and the US put more pressure on the Yen as both countries take harder stances before a high-stakes tariff negotiation deadline. Meanwhile, the Bank of Japan stood pat on its wait-and-see stance, solidifying expectations of incremental policy normalization. USD/JPY is trading slightly higher after the US Dollar steadies against weak ADP data. Surching US-Japan trade tensions and dovish BoJ policy tone are keeping the Japanese Yen under pressure. Markets now look towards the critical US Nonfarm Payrolls report for further cues. • USD/JPY is trading around 143.75, having recovered slightly after touching a three-week low. • US Dollar bounces back marginally despite ADP reporting a surprise loss of 33,000 private-sector jobs in June. • Wage growth holds steady, maintaining the Fed’s policy framework in mind prior to the NFP release. • US Dollar Index (DXY) increases 0.25%, rebounding from its lowest level since February 2022. • Trade tensions intensify as the US and Japan dig in ahead of the July 9 tariff negotiation deadline. • Former President Trump threatens up to 35% tariffs on Japanese imports, boosting market uncertainty. • BoJ Governor Ueda remains guarded, indicating no near-term rate moves while watching inflation developments. The USD/JPY exchange rate also captured wider market sentiment as investors absorbed important economic news and geopolitical events. The surprising drop in US private-sector hiring, as marked by the ADP report, added new worries about the extent of labor market deceleration. While wage increases continued to hold steady, the job losses have stoked expectations for possible monetary policy reduction by the Federal Reserve. Nonetheless, traders are still wary of the more conclusive Nonfarm Payrolls data, which will best illuminate the economic picture and the Fed’s next step. USD/JPY DAILY PRICE CHART SOURCE: TradingView Internationally, heightened tensions between the United States and Japan in recent times due to trade negotiations have created an extra layer of uncertainty. As the July 9 deadline draws near, neither side seems keen on making concessions, particularly in areas such as tariffs on Japanese exports and safeguarding domestic industries. Former President Trump’s assertive language has put pressure on Japan, while Prime Minister Ishiba has stuck to his guns in protecting national interests. These events have attracted the attention of international investors, who are monitoring closely for signs of further escalation that would influence economic relations and currency movements. TECHNICAL ANALYSIS USD/JPY is trying to make a minor rebound after finding support at around the 143.00 area, a level which concides with recent lows. The pair touched an intraday high around 144.25 briefly but was unable to sustain the momentum, indicating possible resistance at that area. A prolonged break above 144.25 would then pave the way towards the 145.00 psychological level, while a loss of holding above 143.00 would result in fresh bearish pressure. Momentum oscillators such as RSI and MACD are still in a neutral to slightly positive stance, mirroring the pair’s measured recovery amidst a larger-scale consolidation phase. FORECAST If future US economic releases, specifically the Nonfarm Payrolls report, indicate job growth resilience and stable wages, the US Dollar may strengthen further. Such a move should propel USD/JPY upwards, especially if sentiment turns away from near-term Fed rate cuts. Breaking the 144.25 resistance level may push the pair to test the 145.00 level, with further upside possibly seen in the 146.50 zone if buying pressure gathers momentum. On the negative side, though, if the NFP report does validate labor market softness or sets off heightened expectations of near-term Fed easing, the US Dollar could again face selling pressure. In such a case, USD/JPY would likely decline back towards the 143.00 support level, and a penetration through this could expose the pair to further losses down to 141.80 or even the psychologically significant 140.00 level. Furthermore, rising US-Japan trade tensions could also serve to drive up demand for safe-haven Yen, putting downward pressure on the pair.

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Currencies USD/JPY

Japanese Yen Gains Strength on BoJ Rate Hike Speculations and International Safe-Haven Demand

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  • May 22, 2025
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Japanese Yen (JPY) has gained significantly, touching a two-week high relative to the US Dollar (USD), as a result of a mix of bullish domestic and international drivers. Optimistic Japanese Machinery Orders data has raised hopes of Japan’s economic turnaround and speculation regarding additional rate hikes by the Bank of Japan. At the same time, fresh safe-haven demand amid rising geopolitical tensions and fear of the US fiscal prospects has contributed to the Yen’s popularity. Poorer-than-expected US economic reports, hopes of Federal Reserve rate cuts, and political uncertainty over President Trump’s tax bill have also pushed down the USD, further supporting the bearish leaning of the USD/JPY pair. KEY LOOKOUTS •  Monitor any new comments or policy changes from the Bank of Japan, particularly on interest rate rises, as ongoing monetary tightening may foster further JPY appreciation. • The main indicators like Weekly Jobless Claims, Existing Home Sales, and coming PMIs will be instrumental in assessing the well-being of the US economy and determining USD direction. • Persistent tensions in Gaza and Ukraine, as well as US-China trade tension, can drive safe-haven flows into JPY, supporting downside pressure on USD/JPY. • Strong technical support is at 143.20 and 142.35, with resistance around 145.00–145.40. RSI close to the oversold zone on shorter timeframes indicates potential for near-term consolidation or a small bounce before the next move. Markets should keep a close eye on major events influencing the USD/JPY pair, as various factors still determine its short-term course. The hawkish stance of the Bank of Japan, fueled by robust domestic indicators such as the recent Machinery Orders jump, is likely to create room for additional interest rate increases, which would strengthen the Yen. Geopolitical tensions and global economic instability are also expected to continue driving demand for the safe-haven JPY. In contrast, the US Dollar remains under pressure amid weak macroeconomic data, fiscal concerns linked to President Trump’s proposed tax bill, and growing speculation about Federal Reserve rate cuts. Technically, the pair faces strong resistance near 145.00–145.40, while a break below 143.20 could trigger deeper losses, making upcoming US data and global sentiment key factors to watch. The Japanese Yen is still underpinned by robust domestic data, BoJ rate hike prospects, and haven demand. On the other hand, USD/JPY is threatened by a soft US Dollar due to fiscal worries and Fed rate cut predictions. The next move will be led by key levels and future economic releases. •  The Japanese Yen touched a two-week high due to robust domestic fundamentals as well as haven inflows. • Japan’s Core Machinery Orders increased 13% in March, beating forecasts and reinforcing economic optimism. • Positive news reinforces speculation that the Bank of Japan will keep hiking interest rates. • The US Dollar continues to be pressured by fiscal worries and Federal Reserve rate-cutting expectations. • Ukraine and Gaza conflict and US-China trade tension fuel safe-haven flows into JPY. • Major resistance is at 145.00–145.40, with a break below 143.20 having potential to propel USD/JPY to further downside. • Investors should monitor US jobless claims, housing sales, and PMIs for new direction in USD/JPY. Japanese Yen continues to benefit from a mix of favorable domestic news and increased global uncertainty. Recent statistics indicating a steep rise in Japan’s Core Machinery Orders have brightened optimism about the nation’s economic revival, supporting belief that the Bank of Japan might continue with additional interest rate increases. This represents a major change from Japan’s history of ultra-loose monetary policy and indicates strengthening faith in homegrown demand and inflation stability. Moreover, hopes of increasing wages and consumer consumption are underpinning the wider picture for continued growth in Japan. USD/JPY DAILY PRICE CHART CHART SOURCE: TradingView Globally, the Yen is also enjoying its habitual safe-haven status with increased geopolitical tensions and fears about the US fiscal condition. The recent US tax bill, which would substantially increase the federal deficit, has created investor concern about the long-term economic soundness of the country. Concurrently, persistent tensions in the likes of Ukraine and the Middle East, and reviving trade tensions between the US and China, are contributing to market volatility. These events are forcing investors to turn to safe assets, and the Yen has been the favored pick in uncertain times. TECHNICAL ANALYSIS USD/JPY currency pair is demonstrating bearish momentum, with current price action having difficulty maintaining any serious recovery. The duo has been facing resistance in the 144.40 area, which is a significant retracement level as well as the 200-period SMA on the 4-hour chart and indicates sustained selling interest at higher prices. Oscillators on the daily chart are starting to turn bearish, indicating an increasing downside bias. Concurrently, the Relative Strength Index (RSI) on smaller timeframes is moving towards oversold levels, suggesting a possible short-term consolidation or corrective bounce. A clear violation of the 143.20 support level would set off selling pressure, exposing levels of 142.35 and further beyond to the 142.00 psychological level. FORECAST USD/JPY pair is able to stay above significant support points and sentiment surrounding the US economy turns positive, there’s scope for a short-term recovery. A welcome surprise in future US economic reports, for example, jobless claims or housing numbers, may provide short-term relief for the US Dollar. Then the pair may try to retest the 145.00 psychological level. A persistent break above here may set the stage for a rise up to the 145.35–145.40 resistance area, provided investor sentiment becomes bullish on riskier assets and the Federal Reserve dials back its dovish tone. Conversely, further US Dollar weakness on the back of fiscal worries, dovish Fed hopes, or weak macroeconomic data may keep piling pressure on USD/JPY. When the pair falls below the 143.20 mark, which is a key Fibonacci support, it could unleash heavy technical selling. This would project the fall further to 142.35 and even to the 142.00 area. Additional geopolitical tensions or robust Japanese numbers might support the safe-haven demand for the Yen, extending the move lower in the next sessions.

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Currencies USD/JPY

USD/JPY Rally Extends Amid US-China Trade Deal Hopes and Fed’s Hawkish Tone, Targeting 145.00 Level

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  • May 8, 2025
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Japanese Yen (JPY) continues to come under pressure due to hopes over a US-China trade deal and the hawkish tone of the Federal Reserve driving the USD/JPY pair higher, with the pair near the 145.00 level. In spite of the Fed’s rate pause cues, the USD remains supported by the continued hopes for trade deals fueled by US President Trump’s statement about the announcement of a big deal. While the Bank of Japan (BoJ) provides cues about prospective interest rate increases in 2025, the global economic risks, especially about the US tariffs, may cap firmer JPY losses. Technical indicators are indicating further upside in USD/JPY, with levels to keep an eye on at 144.00 and 145.00. KEY LOOKOUTS • The USD/JPY currency pair is moving up as a result of optimism over a US-China trade agreement and the Federal Reserve’s policy of maintaining rates unchanged, which indicates support for the US Dollar. • The minutes of the BoJ indicate possible future interest rate increases in 2025, although global uncertainty and economic unpredictability will constrain the Japanese Yen’s losses. • President Trump’s statements on a significant trade deal announcement also increase investor optimism in the US Dollar, supporting JPY’s underperformance as a safe-haven currency. • The duo is set to test the 145.00 psychological level, with major technical resistance at 144.00 and support levels near 143.40, which affect market mood and price action. USD/JPY pair maintains its rally, supported by a mix of US trade agreement optimism and the hawkish bias of the Federal Reserve, which supports US Dollar confidence. President Trump’s recent remarks over a big announcement of a trade deal have even further added fuel to anticipation, boosting the USD against the Japanese Yen. The Bank of Japan has even threatened to hike interest rates in 2025 but with worldwide economic uncertainties surrounding the tariffs imposed by the US having checked the ascent of the Yen. Consequently, the duo is getting close to the 145.00 level, with technical charts indicating that resistance at 144.00 and support at 143.40 will be the key determinants of the next direction. USD/JPY pair keeps on moving upwards, fueled by US trade deal optimism and a dovish Fed attitude. Although the Bank of Japan hints at future rate rises later in 2025, global uncertainties continue to put pressure on the Japanese Yen, taking the pair towards the 145.00 level. •  Optimism over US-China trade discussions increases investor confidence, favoring the US Dollar relative to the Japanese Yen. • The Fed’s hold on interest rates has supported the US Dollar, which has helped its strength against safe-haven currencies such as the Yen. • In spite of worldwide economic uncertainty, the Bank of Japan indicates that it can increase interest rates in 2025, curbing further losses for the Yen. • President Trump’s words regarding a significant trade deal announcement later today further support USD sentiment, pressuring the Yen. • Continuous uncertainty stemming from US tariffs and geopolitical unrest, including the Russia-Ukraine crisis, dents the safe-haven value of the Yen. • The pair is close to crucial resistance at 145.00, with levels of support at 143.40 and 143.00 probably shaping subsequent price action. • Traders expect President Trump’s press conference to offer fresh cues on the course of US trade policy and impact the overall market mood. USD/JPY currency pair is picking up speed, spurred on by increasing hope surrounding US-China trade negotiations and the recent dovish tilt in Federal Reserve monetary policy. Supportive comments by President Trump on a big trade deal announcement due later today again boosted confidence in the US Dollar, as global economic volatility remains a source of concern that keeps the Japanese Yen on the back foot. The expectation of a possible US trade agreement and the Fed’s choice to wait before lowering rates have helped push the US Dollar higher, which has undermined the safe-haven status of the Yen. USD/JPY DAILY PRICE CHART CHART SOURCE: TradingView At the same time, the Bank of Japan (BoJ) is also cautious but indicates that it might hike interest rates in 2025 if inflationary trends persist. In spite of these possible plans to tighten, the BoJ remains wary of global economic uncertainty, notably regarding US trade policy. Consequently, the potential for the Yen to recover is subdued, notably as the US Dollar remains buoyed by optimism over trade deals and general market sentiment. Traders are following events closely, which influence the current direction in USD/JPY. TECHNICAL ANALYSIS USD/JPY currency pair is now probing major resistance levels near the 144.00 level, and has the potential to move past 145.00, which is a psychological level. The 200-period Simple Moving Average (SMA) on the 4-hour chart is still a key metric to monitor, as it has acted as a resistance level in the past. If the pair is able to break above 144.30, it may lead to a rally up to the 145.00 level and further to 146.00. On the other hand, the immediate support areas are around 143.40-143.35, and a break below these levels would likely send the pair to the 142.35-142.00 region. These technical considerations, in addition to overall market sentiment, will most probably dictate the near-term direction of USD/JPY. FORECAST USD/JPY pair is expected to continue its bullish trend, particularly if the pair successfully crossed the 144.30 resistance level. A prolonged movement above this level may set the stage towards the psychological 145.00 level, a key level to watch for traders. If the US Dollar continues to be strong on sustained optimism regarding US trade agreements and the hawkish policy of the Federal Reserve, USD/JPY may continue its rally, possibly testing levels around 146.00 in the near future. Momentum indicators also indicate that if the pair continues to be bullish, it may move higher, driven by investor optimism regarding the US economy and declining global risk concerns. Conversely, if the pair is rejected around the 144.00-144.30 levels and cannot stay above these levels, a corrective retrace might ensue. Levels of support around 143.40-143.35 are

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